AXA Real Estate Investment Managers announced that it has acquired the Cleveland Street office building in Sydney, from the Australian Postal Corporation. The total deal size is A$168 million (approx. €116.8 million) for the land and redevelopment works. This acquisition is a sale and lease back transaction with Australia Post on behalf of a Singaporean client.
This acquisition is made in collaboration between AXA Real Estate and Eureka Funds Management, an Australian fund manager focused on the alternative investment sector in Australia.
The 29,000 m² office building is currently undergoing extensive refurbishment to develop it into Grade A office accommodation. It was one of Sydney’s first CBD fringe office developments, and has been home to the New South Wales headquarters of the Australia Post since the 1970s who, under the terms of the transaction, have committed to a new 15 year lease, with fixed annual rental uplifts.
The building is targeting a 4.5 star NABERS rating. Completion of the refurbishment is expected in mid-2014.
Commenting on the acquisition, Pierre Vaquier CEO of AXA Real Estate said: “This is an important acquisition for AXA Real Estate as it marks further progress in our ambition of growing a truly global real estate investment management platform. Whilst we are already active in the Asia Pacific region through our investments in Japan, the move into Australia is significant as it provides us with exposure to a new territory and allows our clients to benefit from our global investment and asset management expertise combined with that of a local asset manager in Eureka.”
Frank Khoo, AXA Real Estate’s Global Head of Asia, added "We are glad to acquire this asset for our client as part of their diversification and wealth preservation strategy. This asset provides both strong cash on cash and also attractive total return on a risk adjusted basis for our client."
Source: FTI Consulting